Title: Relationship of HDFC Ltd. with Nifty 50.
Author: Harshit Dubey
Introduction: HDFC Ltd, one of India’s leading mortgage lenders, has shown resilience in the financial sector. From April 1, 2023, to March 31, 2024, its share performance remained relatively stable, with moderate growth driven by steady demand for housing loans and consistent financial results. While the stock is less volatile than many in the market, those seeking higher growth may find its pace conservative. However, for investors looking for stability and consistent returns, HDFC Ltd may present a more attractive option compared to riskier investments.
Objective: To find out Beta of HDFC Ltd. And its significance.
Data Collection: Data for Nifty 50 and HDFC Ltd. was downloaded from NSE site from the period 1-4-2023 to 31-3-2024. The Data was manipulated to get Friday closing price and weekly returns were calculated by using formula (Yt-1 – Y t) Yt * 100. Weekly returns of HDFC Ltd. were regressed on weekly return of Nifty 50.
Data Analysis : Weekly Return of HDFC Ltd. = 0.54 + weekly return of Nifty 50 = 0.30
= 5.4542
N=45 , R2=0.4089, F=29.78, P Value=2.26
The above equation shows the relationship between Nifty 50 and HDFC Ltd. The positive sign before 0.30 means if Nifty 50 rises HDFC Ltd. will also rise and vice versa. The coefficient of Nifty 50 has tstat=5.45 and P value of which is 2.26 . It is more than 0.50 meaning Nifty 50 is not statistically significant to increase the prices of HDFC Ltd. R 2=0.4089 meaning 0.04% of HDC Ltd prices are explained by Nifty 50, 99.6% depends upon other factors like fundamentals. F=29.78and the P-value for this is 2.26 meaning it is more than 0.05 means overall model is statistically significant.
Conclusion: As 0.30 is in positive relationship, it is advisable to invest in this stock for long term